Technology Salon

US funded foreign assistance as we knew it on January 19th is gone. That is now the “before times” in international development.

Today, USAID is defunded and the State Department is struggling to step in. About 85% of US government funding is gone and over 20,000 jobs in the USA are lost. Or as several people said: put total USG funding at $0 for the next few years.

Yet, not all is lost. Our recent Technology Salon DC asked How to Survive (and Thrive!) in 2025?

The question is real and really relevant. There is still a need for development. There are still committed people and funding to make a difference. There is still hope. That was the core message from our Salon thought leaders:

• Priya Jaisinghani Vora, Digital Impact Alliance
• William Warshauer, Technoserve
• Aasit Nanavati, DevResults
• Victoria Vrana, Global Giving

Private foundations and donors are stepping up, but a huge gap remains. Could the private sector be a savior? What other trends are becoming evident?

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Private Sector Promise

There was a long and detailed discussion about the opportunity of working with for-profit corporations to effect social change. As government aid budgets shrink, business funding can play a bigger role. This mirrors funding trends in place for a decade or more where foreign direct investment outstrips foreign aid by 2:1 or more.

The best poverty alleviation programs are domestic industries that drive economic (and social) outcomes themselves. And within those companies, it’s the Procurement Director who has the greatest impact on local development. Yet, how many of us have meetings with the procurement teams in private sector companies?

At the same time, we cannot expect the private sector to embrace development outcomes like bilateral government funding did. We’ll need to develop different business cases and show how shared value will benefit investors, in addition to our usual constituencies.

There is also an opportunity for development finance institutions to have a larger role. For example, this Administration has proposed quadrupling the DFC budget from $1 to $4 billion – a tenth of the total international affairs budget.

This embrace of the private sector will take a mental shift in how we see our work and ourselves. A shift that may be harder than we assume – or not possible at all. As one person put it: I’m never working with (or for) the private sector!

Platforms of Diverse Support

One compelling idea put forward was to develop “platforms” for development activities. These would combine funding from a variety of partners (private sector, government, philanthropists, etc.) with interests in the same issue.

Each partner can benefit from the investments made by the others allowing them to stretch tight aid budgets further. Kinda like USAID did with the Gates Foundation and other donors and partners for years, with mixed results.

Personally, I think this idea will be problematic. It supposes there are solutions to problems that governments, donors, and the private sector will agree on. I found it very hard to herd cats even when one donor (USAID) was putting up the vast majority of funds.

I struggle to see how several entities with similar funding sizes will not revert to focusing on their vested interests when there isn’t a biggest player leading the process. I would love to be proven wrong.

Leading with Localization

Back in the before times, there was always good talk about localizing aid leadership, but it never amounted to much past platitudes. Now, times are different. When the international funding ended, there was a clear realization that many localities have to lead themselves. This means local resource mobilization by governments and a focus on real poverty alleviation. That may be surprising to some governments.

For example, I know of one country that didn’t invest in health in the before-times. The sector was funded almost exclusively by international donors – mainly USAID. Now that international aid is gone, will the country step up and support health programming (and therefore decrease funding elsewhere)? Or will just let a portion of its population get sick or die? This is the dark reality of localization too.

As one participant said: we cannot want more change than the local government.

On a positive note, there are countries that are investing in local organizations and local solutions – and several of us now work for these local organizations. This is the silver lining of the job losses. High quality, highly educated, and highly motivated staff are now scattered among local organizations, increasing their capacity to deliver at the field level.

These local organizations are also connecting directly with individual American donors. They are connecting money and resources to change and impact. Yes, there are still pretty photos and heart-warming anecdotes – we are all humans after all – but there is more focus on measurement. There could even be true multi-year impact evaluations that look at long-term outcomes, not just outputs.

What is Next for Development?

I strongly believe this spring was an extinction-level event in US-funded development. We had wholesale destruction of agencies, companies, programs, and careers. I also believe that we’ll see a Cambrian explosion of new organizations and business models over the next year or so that (I hope) will deliver on the promise of foreign assistance in a new and better way.

In the near term, we may feel more pain, we may see more departures, we may encounter more chaos. Change will be the only constant. It is always the only constant.